Amazon due to post results; Google goes to court

Report: Online retailer will rent downloadable movies, TV shows

By

BenCharny

SAN FRANCISCO (MarketWatch) -- Shares of leading Internet companies closed higher Monday, highlighted by a rise in Amazon.com Inc.'s stock after a report the company would enter the video-rental business.

The Dow Jones Internet Index
DJI_DJINET
was up 2.6% to 82.83 while the technology-heavy Nasdaq Composite Index
COMP, -0.02%
finished the trading day 2.1% higher at 2,061.84.

Amazon.com
AMZN, +0.08%
rose 3.4% to $34.31, a day ahead of its quarterly report. After the bell on Tuesday, the online retailing giant is expected to report sharply lower profit for the second quarter, even though sales are seen surging, as the company faces higher shipping costs and stock-option expenses.

A report on the Web site of the trade magazine Advertising Age said Amazon in August will roll out a service to allow consumers to download movies and television shows over the Internet. An Amazon spokesman said Monday the company "doesn't comment on rumor or speculation."

Yahoo Inc.
YHOO
shares were also trading higher Monday, up 4.1% to $26.94, while regaining some of its large losses last week.

Shares of the Sunnyvale, Calif.-based firm slid more than 22% last week after it reported second-quarter financials that missed estimates and announced the delay until possibly next year of a key upgrade to its advertising platform.

Google was in the Texarkana courtroom of Circuit Court Judge Joe Griffin Monday, asking him to approve a $90 million settlement that's drawn fire because one-third of that total is earmarked to pay legal fees.

The class-action suit in the name of thousands of online advertisers charges that the reach of Google's advertising is inflated by Internet users and automated programs that click on online ads with no intention of buying what's advertised, and that Google isn't doing enough to stop the practice.

Also, the settlement reportedly limits the amount that Google will reimburse advertisers who've been the victim of such click fraud to a few hundred dollars in advertising credit. That's less than Google now pays, according to critics of the agreement, who include some of the 50 or so advertisers in the lawsuit class that have opted out of the settlement.

Among other Internet stocks, shares of Akamai Technologies Inc.
AKAM, +0.60%
were among the biggest movers in the session, rising 6.1% to $31.30. Another big mover was travel Web site Travelzoo Inc.
TZOO, +3.77%
which ended 7.1% higher at $29.49.

Travelzoo investors got a boost of confidence Friday from Gilford Securities. In a note to clients, analyst George Mihalos maintained his hold rating on the stock and wrote of positive factors despite recent second-quarter financial results that suffered from a weaker-than-expected number of new subscriptions.

Another big mover among lesser-known Internet stocks was ValueClick Inc.
VCLK
shares of which jumped 6.6% to $14.21.

On Monday, Jeffries & Co. analysts said to expect ValueClick to report better-than-expected second quarter results next week, mainly because of online advertising behemoth Google's failure to gain traction with an offering of its own that competes with ValueClick's.

Shares of online media concern CNet Networks Inc.
CNET, -3.02%
rose 4.6% to $7.78 a share ahead of its second-quarter financials, out after the closing bell.

Intraday Data provided by SIX Financial Information and subject to terms of use. Historical and current end-of-day data provided by SIX Financial Information. All quotes are in local exchange time. Real-time last sale data for U.S. stock quotes reflect trades reported through Nasdaq only. Intraday data delayed at least 15 minutes or per exchange requirements.